British Airways has scrapped its flagship environmental project that was set to turn carbon-rich household waste into biofuel for aircraft.

The airline had partnered with technology firm Solena Fuels Corporation, which filed for bankruptcy three months ago, to build the plant on a disused industrial site in Essex for its ‘Green Sky London’ project – due to open in 2017.

BA said it was “very disappointed” that despite its commitment to the project, Solena was “unable to progress it through to construction”.

The facility would have been able to convert around 500,000 tonnes of waste, which would otherwise be sent to landfill sites, into 50,000 tonnes of low-carbon jet fuel every year.

BA said the project has been mothballed due to low crude oil prices, concerns among investors and a lack of policy engagement from the Conservative government.

“The government needs to support innovative aviation biofuels projects such as this if they are to progress,” said Cathy West, a BA spokeswoman told The Guardian.

“Aviation fuels are not eligible for incentives that road transport fuels receive, making it difficult to build a business case to invest in UK aviation fuels projects. This affects investor confidence.”

She added: “The UK is currently losing out to countries that have prioritised and incentivised developments in the sustainable aviation fuels market.”

The project was due to cost around £200 million with BA originally pledging to purchase the plant’s total output of biofuel for the first 10 years of operation at market prices.

US firm Solena filed for bankruptcy three months ago and BA has now switched attention to other waste-to-fuels firms where joint projects are thought to be at the due diligence stage.

In November, British Airways was named among the least fuel-efficient airlines operating transatlantic routes.

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